NETGEAR Inc. (Nasdaq: NTGR) – Q1 FY 2011 Earnings
Friday, April 15, 2022 3:00 PM

A global networking company, NETGEAR Inc. (Nasdaq: NTGR) is expected to report its first quarter FY 2011 results on April 18, 2011. Over the last four quarters ending December 2010, the company’s reported EPS exceeded analysts’ consensus estimates for March 2010, June 2010 and September 2010 by margins of 60 percent, 18.80 percent and 18.40 percent, respectively. For quarter ended December 2010, the reported EPS missed analysts’ consensus estimates by a margin of 8.30 percent.

NETGEAR is a global networking company that delivers innovative products to consumers, businesses and Internet service providers. For consumers, the company makes high performance, dependable and easy home networking, storage and digital media products to connect people with the Internet and their content and devices. For businesses, NETGEAR provides networking, storage and security solutions without the cost and complexity of Big IT. The company also supplies all of the top Internet service providers with retail proven, whole home solutions for their customers. NETGEAR products are built on a variety of proven technologies such as wireless, Ethernet and powerline, with a focus on reliability and ease-of-use. NETGEAR products are sold in over 28,000 retail locations around the globe, and through more than 37,000 value-added resellers. The company's headquarters are in San Jose, Calif., with additional offices in 25 countries.

For the final quarter of 2010, NETGEAR reported revenues of $258.5 million, compared to $218.8 million for the fourth quarter ended December 31, 2009, and $236.0 million in the third quarter of 2010. Net income on GAAP basis for the quarter was $13.6 million, or $0.37 per diluted share. This compares to GAAP net income of $7.9 million, or $0.22 per share for the fourth quarter of 2009, and to $13.1 million, or $0.36 per share in the third quarter of 2010. Net revenue for the full year 2010 was $902.1 million, a 31% increase over the $686.6 million in sales for 2009. Net income for FY 2010 was $50.9 million, or $1.41 per diluted share. The net income was a 447% increase over net income of $9.3 million or $0.27 per share for 2009.

During the years of 2010 and 2009, the company did not repurchase any shares of common stock under the open repurchase authorization. As of December 31, 2010, NETGEAR was authorized to purchase up to an additional 4.8 million shares under the share repurchase plan. The company has never paid dividends on its common stock and has no plans to pay dividends in the foreseeable future.

In the communication industry, NETGEAR competes with companies like Cisco Systems Inc. (Nasdaq: CSCO) and Hewlett-Packard Company (NYSE: HPQ). For trailing 12 months, Cisco reported earnings of $1.32 per share on revenues of $42.36 billion, with quarterly revenue growth of 6 percent. HPQ reported earnings of $3.92 per share on revenues of $127.16 billion, with quarterly revenue growth of 3.60 percent. In comparison, NETGEAR reported earnings of $1.41 per share on revenues of $902.05 million, with quarterly revenue growth of 18.10 percent.

NETGEAR has a total market capitalization of $1.18 billion. It has a P/E ratio of 22.99, lower than the average industry’s P/E of 34.60. The P/B ratio of the company is at 2.20, significantly lower than the industry’s P/B of 3.94. The company’s net profit margin is 5.27 percent, better than the industry’s margin of 3.50 percent. The ROE of the company is at 11.13 percent, compared to industry’s ROE of 6.20 percent.

For the first quarter ending March 31, 2011, analysts’ estimates of earnings range from the low of $0.48 per share to the high of $0.54 per share, with a consensus estimate of $0.52 per share. Earnings were $0.48 per share in the year ago quarter.  Analysts’ revenue estimates for the first quarter range from a low of $255 million to a high of $257.30 million, with a consensus estimate of $256.23 million. Revenues were $211.56 million in the same quarter a year ago. For the quarter ended March 31, 2011, the consensus EPS forecast has remained unchanged for the last 90 days at $0.52 per share.

In the last 52 weeks, NETGEAR’s shares have been trading in the range of $17.44 to $38.00.